The federal minimum wage should be raised substantially. The negative implications of a higher minimum wage far out way the positive impacts. It is clear that this change would be one that is short sited. Sure, there would immediate positive impacts to higher earnings for some of the populous, but because companies will have to pay their employees more, the overall price of consumer products will eventually increase and the employees would be no better off. According to the Congressional Budget Office, a federal increase in minimum wage to $10. 10 would cause a loss of up to 1,000,000 jobs.
This catastrophic effect will go far beyond just putting people out of jobs. The amount of inflation a measure like this could cause would be detrimental to many people. The savings and retirement accounts of millions of people will be effected. Currently, inflation is 3-4% yearly, which means everyone’s saved money becomes 3-4% less valuable, and an increase in minimum wage would increase that percentage even more. According to a report by Nation’s Restaurant News, the inflation caused by an increase in wages could increase the menu prices of some restaurants by up to 20%.
They also pointed out that while some items may not change, premium items may be raised by even larger margins. Something that is often unforeseen is the extraneous effects of raising wages. In the 1980’s, during a coal boom, wages were raised greatly in the Appalachian regions for low-skilled workers. This was met with a 7% decrease in high school enrollment from students in that region. It would be extremely harmful to the current generation of students to increase wages and in turn promote not finishing high school.
According to a report by the Congressional Budget Office, a lift in earnings to minimum wage earners would take up to 900,000 people out of poverty nationwide. While this may be true in the short term, the inflation caused by the new legislation would catch up and those people would likely go back in to poverty. With all of the facts, it is evident that this stance of a higher minimum wage is very unreasonable and short sited. I think that you should have a more realistic stance that would have less negative impacts to the job market and economy.